Given That MU_X/P_X < MU_Y/P_Y, Consumers Who Spend All Their

question 154

Multiple Choice

Given that MU_X/P_X < MU_Y/P_Y, consumers who spend all their income on these two goods

• A)can never maximize total utility.
• B)have maximized total utility.
• C)can increase total utility by buying more of X and less of Y.
• D)can increase total utility by buying more of Y and less of X.
• E)a and b

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Definitions:

Antitrust Sanctions

Penalties imposed on businesses or individuals for violating antitrust laws, intended to promote fair competition and prevent monopolistic practices.

Price Signalling

A mechanism where the price of a good or service provides information to buyers and sellers which influences their decisions.

Cartels

An association of independent firms or countries that agree to coordinate their production and pricing decisions to monopolize a market and maximize collective profits.

Collusive Agreement

A secret or illegal cooperation or conspiracy, especially between competitors, aimed at deceiving or gaining an unfair advantage in the market.